The Silent Partner Agreement (stille Gesellschaft) is a strategic instrument used in German business practice when companies seek to raise capital without altering their external business structure or management control. This document type is regulated under the German Commercial Code (Handelsgesetzbuch) and is particularly valuable for businesses that want to maintain their current market presence while securing additional investment. The agreement typically includes detailed provisions on capital contributions, profit-sharing mechanisms, information rights, and exit strategies. It's commonly used across various industries, from traditional manufacturing to modern technology sectors, and can be particularly attractive for family businesses or companies that prefer to keep their ownership structure private. The silent partner's involvement is purely financial, with no public-facing role or management responsibilities, making this agreement type distinct from other forms of partnership under German law.

1. Parties: Identification of the operating company and the silent partner, including full legal names, registration details, and addresses

2. Background: Context of the agreement, brief description of the operating company's business, and the intention to establish a silent partnership

3. Definitions: Key terms used throughout the agreement, including specific German legal terms relevant to silent partnerships

4. Formation of Silent Partnership: Formal establishment of the silent partnership relationship and its effective date

5. Capital Contribution: Details of the silent partner's contribution, payment terms, and nature of the investment

6. Profit and Loss Participation: Formula and terms for calculating and distributing profits and losses, including any guaranteed minimum returns

7. Management and Control: Confirmation of the operating company's exclusive management rights and the silent partner's non-interference

8. Information and Audit Rights: Silent partner's rights to financial information and verification of calculations

9. Confidentiality: Obligations regarding business secrets and confidential information

10. Term and Termination: Duration of the partnership, termination rights, and notice periods

11. Settlement upon Termination: Process and terms for settling the silent partner's account upon termination

12. Notices: Communication requirements and contact details for formal notices

13. Governing Law and Jurisdiction: Confirmation of German law application and jurisdiction for disputes